With today's more empowered, skeptical and frugal buyer, a condition we call Frugalnomics, it is imperative that sales and marketing evolve from pitching product pitches to communicating and quantifying value and ROI.
This blog is dedicated to bringing value to every customer conversation, discussing next practices in value messaging, tools and training for B2B marketing and sales.
The Frugalnomics Survival Guide book is available at: http://FrugalnomicsSurvivalGuide.com

Monday, November 29, 2010

Marketing of B2B solutions has clearly become more difficult over the past several years, evident in research from IDC indicating that:

62% of B2B vendors now need more leads in order to generate the same amount of sales;

72% indicate an increase in buying cycle time over the past 6 month, while the buying cycle timeframe has increased over 10% in the past 12 months.

Two economic downturns over the past decade have made buyers more spendthrift, and more skeptical of vendor claims. Fueled by a wealth of on-line resources and social networks, buyers have seized control of the buying cycle, engaging with sales representatives later and later, and further elongating sales cycles. Marketers are scrambling to address the power shift and overcome lead generation and conversion issues by delivering more content and tools over more channels to actively engage ever more empowered, skeptical and frugal buyers.

According to research by Junta42 & MarketingProfs, “Engage or perish" is becoming the defining tag-line driving many new B2B marketing strategies with:

51% of B2B marketers increasing their spending in content marketing over the next 12 months;

Over a quarter of the total marketing and communications budget now going toward content marketing;

9 of 10 B2B marketers leveraging content marketing as part of their marketing programs.

In our research with IDC, SiriusDecisions and other partners, we have found that there are five key trends in buyer behavior reinforcing one other to define the need for different and perhaps even more investment in content marketing programs into 2011 and beyond:

Internet Fueled Buying Cycles – buyers more than ever are taking charge of the buying cycle, using on-line content to drive research, comparisons and purchase decisions. Having the right content and tools to help fuel buyer’s decision making process is essential. This requires the right content at each stage of the buying cycle;

Information Overload –buyers are inundated with more marketing messages over more channels than ever before, becoming overloaded and confused, leading to stalled decision cycles. Better content targeting and personalization is required to end the “carpet bombing” techniques and make meaningful connections.

Matter of Trust - although the research indicates that buyers truly rely on vendor content to help drive purchase decisions, with so much noise, buyers have become skeptical of vendor claims. Content that is created by or endorsed by peers and analysts is becoming more and more essential to create credible connections and engagements, and win over skeptical buyer trust.

Frugalnomics – with two economic downturns over the past decade, buyers are focused more than ever on what solutions can do to help them “do-more-with-less”, drive savings and realize quantifiable bottom-line impact. Content and tools that help buyers assess the economic impact of implementing the proposed solutions, or the cost of “doing nothing”, are essential.

Death of a Salesman? - research from IDC indicates that buyers view sales professionals as adding less and less value to the decision making process, and as a result, are involving them later and later in the sales cycle. Extending this trend over the next five years means that sales may be completely bypassed in some B2B markets, and certainly will be shaped differently by this trend in all markets. Marketing needs to develop content and assessment tools to help sales professionals add value earlier in the sales process, helping to morph current product / solution sales methodologies towards value selling engagements.

These five buyer trends will truly define the next decade in marketing, creating a roadmap for additional content marketing investments. Content marketing needs to grow and evolve to thrive in this changed buying environment, and should include the following five initiatives:

Buying-Cycle Aligned Content – investment in the right content and tools to empower buyers through the prospect driven buying cycle, including in the:

Early stages (to help buyers understand what problem they have and how others have solved it) providing market opportunity and research white papers and webinars, e-books and magazines, advice blog posts, peer forums, and interactive executive assessment tools;

Later Stages (to help buyers know what it will take to purchase and implement the solution and how proposed solutions compare to the competition) providing evaluation and pilot programs, feature comparisons, quoting and configuration tools, competitive intelligence articles and blog posts, and total cost of ownership (TCO) comparison tools.

Personalized Content – developing not just more, but “smart content”, to help cut through the noise and create a one-to-one dialogue with buyers, using prospect profile, opportunity and pain-point information to present just the right personalized content at the right time, including personalized e-mail blasts, web-site content, interactive white papers and executive assessment tools;

Building Trust - Leverage of third party endorsements from buyer’s peers, analysts and other trusted sources to overcome skepticism and gain buyer trust, especially independent or validated reviews, peer forums, testimonials and success stories;

Fight Frugalnomics - for buyers forced to “do-more-with-less”, and focused more than ever on bottom-line impact and best value from all investments, the creation of more economic focused content and interactive tools to helping buyers quantify the value of solutions, especially benefit focused white papers, benefit assessments, ROI calculators and TCO comparison tools;

Sales Enablement - content to empower sales professionals to engage earlier in the buying process, before prospects have already made their purchase decision, and with a value selling versus product / solution focus. For example, this could include methodologies, presentations, white papers and assessment tools to help sales professionals identify and illuminate buyer issues, benchmark buyers versus competitors and best practice leaders, and create / drive solution roadmaps to help resolve the most pressing customer issues.

The organizations that recognize these significant and fundamental B2B buyer changes, and align their content marketing budgets to empower buyers, engage one-to-one, build trust, address economically focused buyers and enable sales to engage with more value will be the winners in the next decade.

Let us examine each of the trends and research in detail:

Internet Fueled Buying Cycles
The Internet has made more information available via more channels, and this wealth of information is being leveraged by buyers to make key purchase decisions, redefining how, when and where buyers engage, select and purchase your solutions.

In the B2C space, the Internet has dramatically impacted how books, apparel, electronics, music, cars and other goods are bought and sold. The consumer is now in charge: researching specifications, configuring and customizing solutions, getting peer reviews and advice, comparing prices, and “buying now”. In many instances, sales forces and channel partners have been disinter-mediated, whereby direct contact with the buyer has been totally replaced with on-line interaction. And the shift to “buyer control” has seen the rise of new retail channels and marketing sites with substantial competitive impact for those that embraced and leveraged the shift, and those that lagged behind.

These B2C buyers now rely on vendor web-sites, independent buyer guides, and social networks to help guide their decisions, and as a result, B2C marketers have had to visibly change to meet these demands. Important has been the marketer’s development and delivery of on-line content and decision making tools to fuel and automate the buying cycle, reviews and transaction. For example, automotive sites now provide more tools than ever to guide buyer’s decisions including customized configurators and pricing tools, competitive comparison tools, video brochures, and Facebook “fan” pages.

Analysts such as Forrester and Gartner are highlighting “consumerization” of business as a key trend for the next several years, and B2B marketing is one area that will face the ‘consumerization” change, making content marketing and interactive decision support tools more important than ever before.

Evidence of this shift can be found in IDC’s 2010 Customer Experience Survey. When asked, over 200 B2B solution buyers now felt that the most important part of the overall purchase process was Vendor Content, with over 1/3rd of the buyers indicating this content as key to the purchase decision. Content may indeed be King to the Internet fueled buying cycle.

IDC survey results indicate that buyers rely on Vendor Content greatly, exceeding the value of direct vendor engagements with technical teams, sales representatives and executives in making key purchase decisions. With a wealth of information available at the click of a mouse, buyers are doing more of their own research and evaluations on-line, relying less and less on vendor interaction to progress through the decision making cycle. Sales teams are being engaged later and later in the sales cycle. Marketers recognizing this shift are providing the content needed at each stage of the lifecycle to fuel the decision making process.

According to SiriusDecision buyer studies, the most favored sources of content during the early stages of b-to-b decision-making are:

White papers (64.4%);

Peer referrals (51.1%);

Webinars (48.9%);

Trials or demos (42.2%);

Analyst reports (37.8%).

In later stages of the sales cycle, analyst reports and peer referrals reign supreme.

Information Overload

Although buyers extensively use and rely on vendor information to make purchase decisions, most of today's buyers indicate that they suffer from “Information Overload” as a result of current "carpet bombing" marketing strategies.

Many of us have experienced this phenomenon, getting more content from more sources than ever before. According to SiriusDecisions, just looking at e-blasts alone, the typical buyer receives over 20 e-mail marketing messages a week, up 32% over the past 4 years. And this is but one of several traditional and on-line channels that are proactively providing information on a daily basis to prospects. Instead of being engaged, buyers are now inundated with more meaningless product information, offers and “noise”, creating a condition often referred to as "marketing fatigue".

One of the keys to cutting through the noise is to provide buyers with more personalized and meaningful content to transcend generic messaging to create an engaging dialogue.

The power of personalization is real, where according to MarketingSherpa and KnowledgeStorm surveys, when content is customized, buyers indicate that the content is much more effective at capturing prospect attention, and most importantly, converting prospects into buyers. The study examined the customization technique and percentage of buyers who indicated customized content is more valuable when customized by this technique:

By Industry = 82% more effective;

By Role / Job Function = 67% more effective;

By Company Size = 49% more effective;

By Geography = 29% more effective.

And this is but a fraction of the customization that could be made to personalize content. Pivot points to customize the content could include customization by stage in buying cycle, specific pain points, specific opportunities and needs, and competitive considerations.

The customization of the content can be generated in different ways to be sure it is relevant to the particular persona and characteristics of the buyer, such as using:

Visitor click activity to determine what information is presented next on the website, or what offers / content to serve;

Interactive white paper and assessment tools that asks the customer a few questions and then tune the white paper content or customized assessment benchmarks interactively based on profile, stage in buying cycle, opportunity, pain points and need.

According to a marketing automation firm Silverpop survey of B2B marketers, even though customization is very effective, only 35 percent of marketers said they were using dynamic content today. However, of those that did, the results of personalized content have been impressive, with 93 percent said it worked better for them than traditional content, and 43 percent reported that it “worked great.”

Matter of Trust

Although buyers clearly rely on Vendor content to do research and make important purchase decisions, and not having this content in today’s Internet fueled buying cycle can be fatal, a conundrum exists where vendors are not always perceived as a trusted source. Perhaps because of the overload of marketing messages received daily, or the boldness of such messages / claims, or the fact that at the end of the day the Vendor is ultimately there to sell something, but the research indicates that buyers are clearly skeptical of vendor produced and provided content.

Buyer survey results from SiriusDecisions indicate that the most trusted sources of marketing content information through the buying lifecycle are industry analysts (cited by 31.4% of respondents), and peers (28.7%), especially early in the lifecycle. The influence of vendors as a trusted source of information lags dramatically, at only 8.1% this year, an increase from 3.1% in 2006, but still much lower on the trust scale than almost all other sources.

Internet fueled buying decisions rely on creating a credible and meaningful connection to the buyer, overcoming the virtual nature of the medium to create trust. Because buyers are researching solutions on-line, they cannot look a salesperson in the eyes to determine credibility. To overcome the skepticism, it is important for content marketers to provide the right content to bridge the credibility gap, including analyst reviews, user testimonials and success stories, third party validation of research and financial justifications, and cultivation of independent peer reviews and feedback.

Frugalnomics

According to Forrester analyst Scott Santucci, go-to-market models always change during periods of disruption, and Great Recession has certainly caused its share of turmoil. “The more buying organizations are forced to do-more-with-less they adopt different business patterns”, says Mr. Santucci.

We term the current shift Frugalnomics, where two successive economic downturns over the past decade have resulted in an increasingly economic focused buyer that demands quantifiable proof that each investment will yield a beneficial bottom-line impact and provide maximum value compared to alternatives.

According to Forrester’s Mr. Santucci, the Frugalnomics focus has significant and fundamental strategy implications. “Today, buyers are looking for business partners that will help them drive business results or outcomes – rather than bundle their products and services into solutions.”

With Frugalnomics, buyers are inclined to not make significant investments or changes, and as a result, customers need to be armed with the tools to “make the case for change”. Unfortunately, most buyers are inclined to “do nothing” during periods of uncertainty; however, there is a "cost to doing nothing". Customers need to be armed with the tools to quantify the cost of indecision and the positive bottom-line impact these changes can have.

In order to attract, connect and capture frugal buyers, marketers need to produce content that raises economic interest, quantifies value, and boosts urgency in a time where it’s easier to do nothing than make a wrong investment. According to IDC research, over 90% of surveyed decision makers now require quantifiable proof of bottom-line benefits on most projects. The larger the purchase, the more formal financial due diligence is required.

However, even though financial impact analysis is required, two-thirds (65%) of buyers indicate that they do not have the knowledge or tools needed to do business value assessments and calculations. As a result, over 81% of buyers expect vendors to quantify business value of proposed solutions.

Content marketers must develop content and dynamic sales tools to engage and empower economic buyers, including research, interactive and traditional white papers, webinars and dynamic sales tools to help quantify the value of proposed solutions, return on investment (ROI) calculators, and competitive total cost of ownership (TCO) comparisons.

Death of a Salesman?

Because of Internet Fueled Buying Cycles, sales is being invited later and later the table, and in some cases, not at all. Buyers can now use the Internet to research and assess opportunities for improvements, find and get solution recommendations, make the financial case for change, compare and contrast competitive options and pricing, and often make the purchase on-line. So what is the role of a salesperson in such an empowered buyer environment, and will this lead to an end of sales as we know it?

According to SiriusDecisions, focusing on marketing costs per sales person indicates that on average companies invest a significant $43,011 / salesperson, an estimated 3%-7% of the opportunity value of the sales pipeline.

However, research by IDC recognizes that although sales enablement investments are significant, the investments may not be delivering on promises. Surveys reveal that buyers are not satisfied with the value sales professionals are delivering to engagements. In a recent survey, 24% of buyers indicated that the sales reps are not prepared for presentations at all, 30% indicate that they are somewhat prepared , and only 29% indicate that they are well prepared. The lack of preparation has been directly shown to drive inefficient conversion, longer sales cycles, more discounting, and higher competitive losses.

So why are the sales enablement investments not paying off?

Are sales professionals resisting the fact that buyers and the buying lifecycle have fundamentally changed? Are marketing and sales enablement teams producing the right presentations, white papers and tools for sales professionals to use in customer engagements?

Is the sales force aware of these tools, and have knowledge to select or are prompted as to which tools to use when?

Is the sales force using the presentations, white papers and tools at all (research by AMA indicates that 90% of marketing materials are not used by sales)?

Is it an issue of acceptance, where the methodology, presentations, collateral and tools are not being accepted by customers as valuable?

Over the next 5 years it is clear that sales has to change to meet empowered buyer needs and continue to add value to the engagement. Content marketing plays an important role in arming sales professionals with the content and dynamic sales tools to reshape the way they engage and connect with ever more frugal, skeptical and empowered buyers.

Marketing needs to play a clear role to either help redefine the sales role and empower sales professionals with the content and tools needed to add value in the buying cycle, or simply remove sales from the process altogether, empowering buyers directly with the content, tools and channel to make their own decisions and buy on their own. Likely, as we have seen in B2C, marketing will need to both help redefine sales engagements and empower direct buying content and channels.

The Bottom-Line
Significant changes in buyer sentiment are prompting savvy marketers to rethink their 2011 and beyond strategies and budgets to tackle these issues, especially increases to content marketing investments, and in particular new initiatives such as interactive smart content™ (like interactive white papers), and dynamic sales tools (such as on-line assessment tools, ROI calculators and TCO comparison tools).

Traditional marketing programs are becoming irrelevant with the “consumerization” of business selling and marketing, and a world of information overload and frugalnomics. Investing in the right interactive and personalized content marketing campaigns to empower buyers, connect one-to-one, improve trust, address economic buying factors and enable sales is proven to drive more qualified leads, increase conversion rates and reduce lengthening sales cycles.

Each week the Content Marketing Institute poses a new question to help drive content marketing best practices. This weeks question: What other areas of the organization can help build loyalty/buy-in to the content marketing program?

One of the most important, but often forgotten consumers of content marketing programs are sales professionals.

In many organizations, Sales and Channel Enablement groups are responsible for leveraging and building best practices so that sales professionals are aware of available content and how to use it effectively in the sales process. Engaging early and often with these groups can help assure that the content is used to best effect by sales professionals when engaging with clients, yielding dramatically expanded content adoption, use and measurable impact on sales cycle and deal flow.

However, research indicates that sales is not always using the content to best effect. According to the American Marketing Association:

90% of marketing deliverables are not used by sales;

Salespeople spend 30 hours a month searching for and creating their own selling materials.

Not only is sales efficiency an issue when it comes to content usage, effectiveness is not all it can be either. IDC reveals in a recent survey that, buyers are not satisfied with the value sales professionals are delivering to engagements. In a recent survey, 24% of buyers indicated that the sales reps are not prepared for presentations at all, 30% indicate that they are somewhat prepared , and only 29% indicate that they are well prepared. The lack of preparation has been directly shown to drive inefficient conversion, longer sales cycles, more discounting, and higher competitive losses.

According to SiriusDecisions, the average company invests over $43K in marketing per salesperson, an estimated 3%-7% of the opportunity value of the sales pipeline. From the research however, content marketers are clearly not getting an adequate return on investment from most sales and channel organizations. Buy-in from these important groups can help drive adoption of content, key improvements in customer engagements, reductions in sales cycles and improved deal flow helping to bolster the case for more content marketing investments.

In our research with IDC, over 90% of executives now require quantified proof of bottom-line impact on key investments, and use ROI more often than not to prove that the investments are generating the expected value to the organization. So if you want to assure that your content marketing efforts get the proper budget and attention they deserve, communicating the value in ROI terms is best.

However, even though the formula for ROI is not a difficult one to calculate by dividing the net benefits of a project by the total investment, the ability to measure and quantify the benefits in tangible terms is often a challenge.

To quantify the benefits, the team will need to track not just downloads or readership/reach of the content, but the impact that the content has on the sales process. Some questions the team will need to answer to quantify the benefits include:

How many of the downloads / views converted into qualified leads and most importantly into sales revenue?

How much did the content help to accelerate the sales cycle / decision-making process, bringing more sales revenue sooner?

How many leads were generated more efficiently using content marketing programs versus other programs (cost avoidance)?

Compare the content marketing costs, including all of the costs for content development, collaboration and management, promotion and distribution, to these quantified benefits.

Thursday, November 18, 2010

Today’s buyers face several unique challenges that make content marketing ever more important to the successful vendor. Buyers are:

More frugal, reeling from two economic downturns in the past decade, and forced to “do more with less”. Less time is available than ever to research issues and find the right solution;

Engaging sales later and later in the buying cycle, and using the Internet, peer networks and other self-service resources to do their own research and make their own decisions;

Overloaded with more marketing information than ever, making buyers more skeptical than ever, and harder to reach and engage.

Content marketing provides a means to break through the noise, providing the consultative diagnostic and financial advice today’s buyer needs. But how can you get started on the journey to a successful content marketing program?

At Gartner, we always opined that “you can’t manage what you haven’t measured,” so I suggest that the first content marketing step should be an inventory of what content already exists. This will include an understanding of what white papers, opinion posts, product data sheets and case studies already exist and could be leveraged, and most importantly, will highlight what is missing.

To promote understanding of what you have covered and where there are gaps, content should be categorized. Some pivot points could include:

Alinean, the leading creator of value-based interactive sales and marketing tools for B2B vendors, today has developed a new return-on-investment calculator for the Interactive Intelligence sales enablement program.

Interactive Intelligence, a global provider of unified IP business communications solutions, is using the ROI calculator to help its sales team quantify the value of its communications-based process automation system, Interaction Process AutomationTM (IPA).

“The ROI calculator by Alinean has armed our sales team with a consultative tool that helps them shorten the sales cycle and close more deals by giving prospects the business justification they require to invest in IPA,” said director of solutions marketing for Interactive Intelligence, Tim Passios.

The Alinean ROI calculator quantifies for IPA prospects current costs and opportunities based on data associated with their existing business processes. It then calculates potential savings, payback, and other metrics based on IPA’s capabilities. The Alinean ROI calculator is database-driven and can be accessed online or offline. The solution includes a 30-plus page report and summary presentation conveying the quantified value of IPA in CFO terms.

“With two economic downturns in the past decade, buyers are more skeptical and frugal than ever — a trend we call Frugalnomics,” said Alinean chairman and founder, Tom Pisello. “Interactive Intelligence understands this current buying environment and came to us so it could give prospects the quantifiable proof they need to show IPA’s value.”

IPA takes proven Interactive Intelligence applications for unified communications — functions such as routing, presence and collaboration — and uses them to automate and move work through each step of a business process from beginning to end.

IPA includes a graphical authoring tool, a service-oriented architecture, an orchestration engine, a presentation framework, real-time monitoring, and both standard and custom reports.

“We designed IPA to most effectively minimize latency and human error to help organizations dramatically reduce processing time and improve processing accuracy,” Passios said. “Now, combined with the Alinean ROI calculator, potential IPA customers can see for themselves how these benefits will deliver measurable cost savings.”

Friday, November 05, 2010

Alinean today annouinces an important charter sponsorship of the Content Marketing Institute (CMI), with Alinean's thought leaders in value selling & marketing helping to contribute key advice to institute members and the ever growing CMI readership.

Started by content marketing guru Joe Pulizzi, the CMI is the go-to source for the latest research, pundit opinions, and best practice advice to help marketers optimize their return on investment from content marketing - the technique of creating and distributing relevant and valuable content to attract, acquire, and engage buyers, is clearly a priority.

How important have these challenges and content marketing become? With the wealth of on-line information available to decision makers, most buyers have leveraged this content to take charge of the buying cycle, engaging with sales representatives later and later. Buyers are clearly in control, and marketers are scrambling to address this power shift, and deliver more content and tools over more channels to actively engage ever more empowered, skeptical and frugal buyers.

"Publish or perish" is now the defining tag-line driving many new B2B marketing strategies, evidenced in research by Joe Pulizzi's Junta42 & MarketingProfs, indicating that:

9 of 10 B2B marketers leverage content marketing as part of their marketing programs, with marketers using eight content tactics on average. The most popular tactics are social media (excluding blogs) (79%), articles (78%), in-person events (62%) and eNewsletters (61%).

51% of B2B marketers are increasing their spending in content marketing over the next 12 months

Over a quarter of the total marketing and communications budget now goes toward content marketing

Trend Micro wanted to help busy security officers and IT managers quickly and easily understand where they might be falling short on security risk and compliance management policies, and how not addressing these issues could lead to potential downtime, data loss, fines, brand damage and bottom-line impact.

Trend Micro subject matter experts worked with Alinean to create the Trend Micro Risk and Compliance Assessment tool, designed to benchmark a company’s current security risk and compliance practices versus peers and best practice leaders. The tool, accessed from Trend Micro’s website, can help the users identify ways to improve their company’s current security practices and the resulting benefits from the improvements.

Thursday, November 04, 2010

I just had the pleasure of presenting a webinar with Randy Perry, VP Business Value at IDC. In this session we discussed some important value selling and content marketing research for technology marketers, much of which extends to other B2B segments, with trends and advice you need to excel in 2011.

Three Key Technology Marketing Trends for 2011
According to IDC, there are three significant marketing trends to focus on into 2011, and these trends have important implications for strategy and budgeting:

IT purchases are strongly influenced by economic trends, and marketers need to target the economic buyer more than ever before, in order to get attention and win the business. According to IDC, over 90% of IT buyers are economic buyers / economically focused;

Technology marketers are focusing more investments on digital channels, and this is good because executives and economic buyers favor on-line research and content. However, with more marketing channels available, and more messages per day than ever reaching these skeptical buyers, marketing fatigue and information overload are prevalent;

Investing more in Sales Enablement is critical as buyers indicate that internal decision making is becoming more complex, while at the same time, sales professionals are not adding the needed information and value needed to overcome the growing buying cycle complexity. As a result, sales is being invited later into the decision making process, sales cycles are extending and deals are stalling.

Let us examine each of these IDC trends in detail and what they mean to 2011 strategies and budgets.

Frugalnomics Reigns
Since the technology bubble burst at the start of this decade, we have found that technology buyers have become more focused on quantifiable bottom-line proof points for most large investments. With the Great Recession more pressure than ever is on IT to do-more-with-less, and the economic buyer is firmly in control, demanding even more financial due diligence. We call the economic buyer trend Frugalnomics, where buyers seek quantifiable proof of bottom-line impact, significant ROI, fast payback and superior value from each purchase.

IDC’s most resent customer experience survey of over 200 key IT decision makers reveals that Frugalnomics is indeed in full effect. Research on what drives IT purchase decisions indicates that decisions are predominantly made based on financial requirements, such as enabling business growth (29%), improving profitability (25%), and reducing costs (22%). These economic driven decisions greatly exceed sentiment for all other purchase drivers such as improving competitiveness, meeting regulatory requirements, or increasing staff utilization.

From this research, it is clear that messages and tools need to be provided to deliver to buyers the evidence they need to understand the value of solutions in enabling business growth, improving profitability, and reducing costs. Failure to provide this content means that buyers are left on their own to determine how your solutions might deliver on these goals and to quantify for themselves what value the solutions might or might not provide. This can cause buyers to slow the buying lifecycle as they struggle on their own to put the pieces together, or worse, dismiss your solution altogether because of perceived benefit or value issues.

When ranking the important factors that influence IT purchase decisions, survey respondents indicated that economic factors once again reign. For the IT buyer, business benefit assessments (34%) and financial assessments (26%) were both highly important to making a purchase decision, greatly exceeding, by more than 2x, the vendor relationship (14%) as a decision driver.

When we look at marketing budgets however, we find that marketing spending is not aligned in most cases with this financial decision making criteria. Most organizations continue to spend much more on branding and relationship management versus value-based sales and marketing initiatives. From these findings, to better align sales / marketing with buyer requirements, the advice from IDC is to allocate more budget to business benefit and financial assessment content, tools and sales support.

Value Selling is a Requirement

The IDC buyer survey indicates that the way IT solutions are currently marketed and sold needs to change. In the early days of IT, product selling was prevalent, pitching products to innovators who were shown a product’s features and functions and then figured out on their own how to apply it to a pain / opportunity.

This advanced in the 1990s to solution selling, where several popular methodologies prompted sales and marketing to ask a buyer questions about their pain points, then aligning solutions to help solve these opportunities.

In today’s frugal environment, buyers don’t always have the resources to research issues or frameworks to understand what might ail them. These buyers seek diagnostic advice to help proactively uncover issues, recommend improvement roadmaps, quantify benefits and assure best value. Survey results from IDC indicate that on average:

90% of corporations surveyed require quantifiable proof of bottom-line benefits on most projects;

Two-thirds (65%) of buyers indicate that they do not have the knowledge or tools needed to do business value assessments and calculations;

81% of buyers expect vendors to quantify business value of proposed solutions.

From the research, IDC indicates that vendors should invest in content, tools and support to help buyers proactively identify and frame their issues / opportunities and quantify the benefits and value of proposed solutions in order to prove contributions to growth, savings and bottom-line impact.

IT Marketing Spending Significantly More on Digital Media
As the second most important trend for 2011, IDC indicates that to no-ones surprise, IT marketers are allocating a higher percentage of the budget to Digital Media, including growing spending on corporate websites, micro-sites, blogs, webinars, virtual tradeshows, search engine optimization, Facebook, Twitter, LinkedIn, banner ads, on-line video and e-mail marketing.

Within digital marketing, analyzing the allocations from 2009 to 2010, IDC found that 2010 spending on digital marketing programs is not changing dramatically year over year. Not surprisingly, spending on company websites will increase the most, growing 43% over 2009 levels, and social network marketing is expected to increase as well, with an increase of 45% over 2009. Declining from 2009 is budget allocations and spending for search ads and search engine optimization, as well as display ads. Buyers are more skeptical than ever, and seem to be using search results less and less to perform research and support key purchase decisions. Instead, trusted sources are becoming more valuable, including content and advice from industry and trade publications, analysts and more and more, peer networks.

Content is King?
Is this digital spending allocation aligning with buyer needs? When asking over 200 IT buyers what they felt was most important part of the overall purchase process, over 1/3rd of the buyers indicated Vendor Content as key to the purchase decision. Content may indeed be king.

IDC survey results indicate that buyers rely on Vendor Content greatly, exceeding the value of direct vendor engagements with technical teams, sales representatives and executives in making key purchase decisions. With a wealth of information available at the click of a mouse, buyers are doing more of their own research and evaluations on-line relying less and less on vendor interaction to progress through the decision making cycle. We call this the “Internet fueled buying cycle.”

Content marketing, and developing content in particular to attract today’s economic focused buyer, is more important than ever to help connect and engage with buyers, and help customer stakeholders make better and faster IT purchase decisions. From these survey results, increased spending on content marketing for corporate web sites and social media would seem to help drive more / faster buying decisions. To help cut through the constant information overload, and help guide decisions more effectively, the most valuable content is that which is tuned to be relevant and engaging to the buyer - one-to-one personalized for example by industry, location, size, stage in buying cycle, role, pain points and opportunities.

The End of Sales as we Know It?

The importance of content marketing, from these survey results, help guide marketers that they should indeed be investing more in developing and delivering the right personalized and engaging content to help buyers drive decisions.

However, the importance of content and lack of priority towards direct engagements points to a troubling trend in that today’s Internet fueled, buyer controlled purchase process is disintermediating sales from the purchase process. Buyers are doing more and more of their own research in the early and middle phases of the sales process, and involving sales reps later and later in the sales cycle, often after key purchase decisions have already been made. Can sales be made relevant and valuable again in these key stages of the buying cycle?

The key to shaping the trends back in the vendors favor certainly requires an investment in content marketing, but also may mean investing more wisely in Sales Enablement to be sure sales is armed with the content they need to effectively engage buyers earlier, and with more value in the process.

Sales Enablement or Perish

Sales Enablement is defined by IDC as: “The delivery of the right information to the right person at the right time in the right format and in the right place … to assist in moving a specific sales opportunity forward.”

However, many vendors would say that sales opportunities are not moving forward the way many would like. Research has revealed that buying cycles have changed dramatically through the Great Recession, as:

62% of technology vendors need more leads in order to generate the same amount of sales;

72% indicate an increase in buying cycle time over the past 6 month, while the buying cycle timeframe has increased over 10% in the past 12 months.

The good news is that it’s not only the tech sales and marketing teams that wants the purchase cycles reduced. Surveys revealed that IT buyers too do not like the duration of todays decision making cycles, and want to shorten the buying cycle time by ~50%. So what is causing the buying cycle delays and frustrations, when all want a quicker, more streamlined buying process?

First, the decision making cycle within most organizations has become more complicated, with more stakeholders than ever before, and more financial due diligence requirements to assure that scarce funding is going towards the highest impact, best value and lowest risk projects.

The key for vendors to address the complexity issue is to help the buyer champions obtain support from the stakeholders throughout the business and provide the supporting financial proof-points of superior benefits, return on investment, quick payback, superior value and lower risk to make funding diligence and approval easer.

Second, the survey results highlight that sales repss are being tagged as not understanding buyer needs, not having valuable resources to add value to the sales process, and not being prepared. To help alleviate these issues, marketing needs to create the right content that buyers see as unique and valuable, and sales needs to know when to use and engage with this information to best effect.

So how can the sales help to address the more complex decision making cycle and add more value to the process? We recommend the following value selling / marketing initiatives:

Assessment Tools and Interactive White Papers- Early in the sales cycle, buyers are looking for strategic guidance to assure that the selected strategy is right. Assessment tools can be used to engage and discover where the prospect is on a capability / maturity scale, comparing progress to peers and leaders to determine how ahead or behind the prospect is compared to others. The assessment could be used to help engage the growing number of stakeholders to understand the reasons for the recommended solutions and align them towards a common goal and solution set. Interactive white papers can be used to better engage overloaded buyers with content personalized based on industry, location, size, pain points and opportunities - delivering more relevance and engagement.

ROI Tools – In the middle phases of the buying cycle, specific solutions are being considered, and need to be prioritized and justified. To engage better with skeptical buyers, sales could use benefit calculators and ROI tools to help quantify the impact that various solutions and options could have to the customer’s bottom-line. Financial business cases could help present the value propositions in unique terms for each stakeholder, and help align the decision makers to a common cause, tieing the proposal to important and unique economic financial goals for each. In this manner, sales can help prioritize and gain support for proposed projects with each stakeholder.

TCO Comparison Tools - In later stages of the decision cycle, the vendor can deliver a total cost of ownership comparison proving lower total cost and better value can help the team know that the best solution was selected. This can help verify amongst all stakeholders that the selected solution represents the best value choice.

The Bottom-Line

From the IDC research, it is clear that today’s technology buyers are more overloaded, skeptical and frugal than ever before. These three trends are driving marketers to revisit and potentially change the way they engage technology buyers:

IT purchases governed by economic buyers more than ever before. Marketers need to directly connect and engage with the economic focused / frugal buyer more than ever before. One way marketers can do this is by providing on-line interactive white papers and assessment tools to help buyers uncover potential improvement opportunities and quantify the business and IT benefits, ROI and payback of proposed solutions.

Buyers rely on digital channels and content more than ever, with most purchasing cycles now fueled by the Internet and controlled by the prospect rather than driven by sales. The key for marketers is to mazimize investments in these digital channels, but understand that information overload is prevelant from the abundance of digital channels and content. Marketers need to work that much harder to break through the information overload with content that will better connect and engage today's more skeptical / frugal buyer. One suggestion is to use more interactive content such as white papers and assessment tools personalized based on industry, location, size, pain points and opportunities.

Buyer decisions involve more stakeholders and more hurdles than ever before. At the same time the decision cycle has grown more complex, sales seems to be less and less relevant in helping buyers overcome the increasing complexity. Sales is being invited later into the decision making process and even worse, potentially disintermediated from the cycle altogether. Marketing in the race to support the multitude of digital channels needs to be sure not to forget that sales is a customer as well, and Sales Enablement is a requirement in order to make sales relevant in this new decade. Investments in the right Sales Enablement processes and assessment, benchmarking, ROI and TCO tools can help make sales professionals more consultative, and enable sales to help buyers overcome their internal concensus, financial diligence and process issues.

To help address a more skeptical, overloaded and frugal buyer, a value sales / marketing tool and process campaign could help, delivering the interactive smart content™, assessment tools, ROI calculators and TCO comparisons needed to overcome skepticism, break through the information overload, and fight Frugalnomics.

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About Me

Tom Pisello, The ROI Guy, is a Serial Entrepreneur, Author and CEO / Founder of Alinean, a developer of B2B value selling and marketing messaging, tools and training.
Tom’s value storytelling and financial justification (ROI / TCO) experience began in 1993 with his first entrepreneurial venture, Interpose, acquired by Gartner in 1998, where he served Gartner as a Managing VP.
Post Gartner, Tom has been responsible for launching and accelerating several innovative companies including Full Armor and Connotate Technologies.
Tom holds a BS Electrical Engineering from SUNY at Buffalo, and a mini-MBA from the Crummer School of Business, Rollins College.
Read his latest book on Amazon: The Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More (http://www.FrugalnomicsSurvivalGuide.com)